Question:

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Hi Ken,

    I have two questions for your on line legal info emails.

    First, due to my integration and automation skills, I have been asked to work on security installations where the monitoring is owned and managed by another security company.  This company does not have the experience or knowledge to operate or manage the equipment on site, which needs to stay due to all of the 3rd party equipment it is controlling other than security.  Where do the both of us stand legally and liable and is there a way to protect all three entities:  Me, the sub, and customer?

    I am working with a sub contracted company to provide internet security to a residence.  Do you have a contract that will cover all three entities, customer – me – sub?  And do you know if the sub needs to be fingerprinted and carry a company ID like all of my employees do?

Thanks

Steve Merola

Futuristic Home

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Answer:

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    You are providing service to the system and another alarm company is providing the monitoring.  You need a Service Contract.  The other company needs a Monitoring Contract.  One of you should present the Disclaimer Notice to the subscriber and get the subscriber to acknowledge receipt.

    Internet security?  I am not clear what that is - but sounds like an issue for Mike Kelly - sign up for his free webinar on Sept 2, 2010.  Here is the info on that:

 

Please Join Us on September 2, 2010 at 3PM ET.-------- Free Register @ www.csaaintl.com

CYBER RISKS--- FEARS AND MYTHS--- WEBINAR SEPT 2, 2010

Sign up for a “FREE” CSAA WEBINAR SEPT 2, 2010 3:00 EASTERN TIME

WWW.CSAAINTL.ORG   https://www2.gotomeeting.com/register/618386874

Speaker; Mike Kelly- Michael J Kelly Insurance Agency mjk@mjkinsurance.com  800-329-5355

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Question:

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Hi Ken,

    I've learned of your services from a former employer, and now I am running my own business, and really appreciate all your advice and services. 

    My business model is different from the traditional alarm company:  I do not lock customers into a contract for time; my services are all month by month, with the subscriber being free to cancel at anytime if they are unhappy.  I don't even offer a time based contract at all, although several subscribers have asked for one.

    I do, however, require each subscriber to sign an "agreement" to help limit my liability, and which states that the customer may cancel at anytime, etc.  It just doesn't lock them in for three years, or whatever time period.

    My question is this:  If I purchase your contracts for monitoring and service, and possibly PERS, how will they work with my "No Contract" business model?

Thanks much,

T.J.

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Answer:

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    You are making two major mistakes.  First, you're not getting contracts with RMR signed.  Second, you're obviously not getting my Standard Form Contracts signed.  You are not building any value to your business, and I have no idea whether your contract form, such as it is, contains the necessary protective provisions you need.  I suggest you get with the program. No need to reinvent this wheel.

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Question:

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Dear Ken

    I have Scottsdale Ins currently but I'm thinking of changing to Security America's program based on your new letters (5% discounts for using your contracts) and other info. 

    I've read their policy but not being an insurance expert it's hard to determine and compare programs. Is their anything to be concerned about that you maybe aware of?

    Do you know a contact person at SARRG?

Sincerely,

Stuart

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Answer:

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    I am comfortable with SARRG.  I think it knows the importance of using proper contracts and, perhaps equally important, how to approach defense cases and protect the laws essential to the alarm industry.  [I should note that I do defense work for SARRG].  SARRG's executive claims administrator is none other than Bart Didden, who owns USA Central Station Alarm Corp, which in my opinion is another plus for SARRG.

    SARRG is the only A.M. Best rated B++ insurance company that is owned by the largest trade association in the alarm industry, ESA (formally the NBFAA) and its policy holders. SARRG is committed to not only providing G/L with E&O coverage, but also to promoting the use of properly constructed contracts so alarm companies can stay in business by offering cost effective products and services to the general public.

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Comment on additional insured

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Ken---

    More on Insurance Certificates for Additional Insured;  Dealers who have 3rd party monitoring need to request an additional Insured Certificates from the Monitoring Central Station.  This will confirm the scope of work and prof.GL/ E&O coverage’s from the Sub-Contractor who is monitoring..  If the Dealer has clients with IP Internet monitoring the Certificate should confirm IP (Internet Protocol) E&O Liability is included.  More on IP Monitoring Sept. 2, at 3PM ET. CSAA Webinar  “The Cyber Risk” Free sign up—www.CSAAintl.org

    If a Dealers Client requested to be named as an additional Insured, make sure only the name of the client that is on the Contract is the Certificate Holder on the Insurance Certificate.   The Dealers work ,and the work of others for the dealer are the policy coverage’s with the scope of work under the “Completed Operations” GL/E&O.    If and when a claim is filed against the alarm dealer the scope of the work as noted above is pay or not pay depending on the fault of the Dealer.  This will greatly help end the sometime endless subrogation issues as to who is at fault , which is big cost for the insurance companies.

    Ken, Again thanks for the Great services of your e-newsletter

Mike Kelly